MOSCOW. June 16 (Interfax) - A decline in the price of oil will not have a significant impact on the Russian budget, Deputy Prime Minister and Finance Minister Alexei Kudrin said.

"Russia is not afraid of a price drop," Kudrin said in an interview with Vesti 24 TV while in Osaka following the meeting of the G8 finance chiefs. "Our budget would not have a deficit at a price of $55 per barrel. The tax system for our oil companies is set up so that as the price of oil declines, taxation declines. So no substantial changes will take place. It will have some effect on our GDP growth, but an insignificant one compared with the earlier period. I repeat, the effect will be insignificant."

"The majority of analytical and energy institutes do not believe that oil prices will drop. Whenever the world economy has slowed, oil prices have always declined, and this opinion prevailed before this meeting. But now I have heard serious concerns that prices won't decline so dramatically, and might even solidify at the new level," he said.

"Here we in fact discussed the role of factors associated with rapidly rising demand and simply the effect of demand on insufficient supply, as well as the effect of other factors, including speculation, when the quest for good investments in commodities, including petroleum and grain, results in buying and higher demand for those goods and additional price growth," Kudrin said.

Kudrin said the finance chiefs had been unable to reach a consensus on the price of oil and other commodities or on the trend that will prevail in the near future.

Some felt prices will stay the same, others that they will rise and others that they will fall, he said. "Therefore, uncertainty concerning prices today can be said to have grown," he said.

Kudrin said one way of resolving the problem of rising food prices is for the G8 nations to increase their contributions to the fund to assist the poorest countries.

Another measure is to speed up the Doha round on lowering agricultural subsidies. "Because they distorts the market, making it impossible to increase the area under cultivation. There are issues associated with food reserves, with investment in that sector, with export restrictions in countries that produce product," he added.